Investment analyst and entrepreneur Marc Faber spoke with FBN’s Connell McShane about how international affairs are impacting his investment strategy and predictions. Faber said that “as a result of the reconstruction work” required in Japan, he believes “Japanese shares are worthwhile to accumulate.” He goes on to predict “a rebound of the U.S. Dollar, weakness in asset markets, correction in commodities, and maybe a rebound in U.S. bonds.” Excerpts from the interview can be found below, courtesy of Fox Business Network.
On how the earthquake in Japan will impact the international economy:
“The key to the performance of Japanese shares is the Japanese bond market becomes unattractive and that the Yen over time weaken. I think as a result of the reconstruction work that may cost up to $300 billion U.S. dollars that obviously the government will have to monetize, will push money into equities. I think Japanese shares are worthwhile to accumulate.”
On how the asset and equity markets are performing:
“I think asset markets have begun a correction. We peaked out on the S&P on February 18th at 1344 and usually in April we have seasonal strength but I think it’s likely that the S&P will not be able to make a new high and then we will have a more significant setback in May, June. I think the Euro, contrary to expectations has rallied. I think what we could see in the next few months a rebound of the U.S. Dollar, weakness in asset markets, correction in commodities, and maybe a rebound in U.S. bonds. We live in very volatile times; a correction could be 10%, 20%. I would on any weakness accumulate gold.”
How what is going on in the Middle East has affected his investment strategy:
“What is happening in the Middle East is friendly for gold, oil, and other commodities. The mess in the Middle East will only increase over time. Nothing has been solved. All these things are indicating, including the earthquake in Japan, that central banks will continue to pursue expansionary monetary policy to keep interest rates artificially low.”